30
Apr
Stamp duty importance highlighted once more
When the stamp duty holiday came to an end at the conclusion of
last month (March 24th), many people predicted that it would see a
slowing in the market, as fewer people would be heading towards
estate
agents if they had little prospect of seeing a discount.
This led to experts like Peter Bolton King, chief executive of the
National Association of Estate
Agents, calling for the government to extend the stamp duty, as
he said that first-time buyers who were looking to get a foothold
on the property ladder had reacted well to the holiday and had
helped to boost the market specifically because of it.
Now, with the latest figures for March published, it is clear to
see that first timers looking to make a saving on the purchase of
their new property were indeed reacting to the holiday, as they
were making last ditch dashes towards homes in order to make sure
they were exempt from paying the additional fee of up to
£2,500 on top of the price of their home.
The Council of Mortgage Lenders (CML) said earlier this week that
in February there was a substantial rise in the number of
first-time buyers looking to get into the market compared to the
same time last year, a fact which it attributed to the rush to beat
the holiday.
During the month, the number of first timers buying houses was a
full 14,100 higher than it had been just 12 months earlier in
February 2011.
CML director general Paul Smee said that it was too early to tell
if this was a direct result of the fact that the stamp duty holiday
was ending, but predicted that the market may start to slow at some
point over the next few months now that people have to pay more
money on top of the value of their home.
Similarly, the Royal Institution of Chartered Surveyors (Rics) has
reported that its agents were seeing a decided increase in the
number of new first-time buyers in the market just last
month.
It reported, as part of its UK Housing Market survey, that nine per
cent more agents had reported an increase in first-time buyers
during the month of March than had reported a decrease. It
strengthened the argument that people were attempting to beat the
deadline for the stamp duty holiday as it was the sharpest rise in
the number of first-time buyers in over two years.
Rics chief economist Simon Rubinsohn, said: "Demand saw a slight
boost in March as many first-time buyers looked to beat the stamp
duty holiday deadline. There has been a gentle increase in activity
across the market in the early part of the year but it remains to
be seen is whether this can continue, given the changes in the
Budget and ongoing problems affecting the economy."
The failure of the government to offer incentives has also been
blamed for the fact that housing prices have drastically fallen at
the end of March. Nationwide has reported that the 0.9 per
cent year-on-year drop during March was the first time prices had
dropped, compared to 2011, for six months.
One area of the housing market where first-time buyers are
apparently suffering more than others is in rural houses, which has
led to one expert calling for more incentives across the country to
help them out.
Martin Collett, operations director at the English Rural Housing
Association, said that some communities were even being broken up
because of the fact that people looking to purchase their first
home could not afford to do so near to where they left, leading to
their moving to more urban areas.
"There are households where perhaps the current rental market isn't
right for them and they aspire to ownership, but because of the
lack of access to an affordable homeownership product, they are
then forced to move to urban areas and commute to support their
family, to visit friends and to work," he added.